UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2003
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission File Number: 000-33187
CareDecision Corporation
------------------------
(Exact name of registrant as specified in its charter)
Nevada 91-2105842
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2660 Townsgate Road, Westlake Village, Suite 300, CA 91361
---------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(805) 446-1973
--------------
(Registrant's telephone number, including area code)
2 Penn Plaza, 15th Floor, Suite 1500-53, New York, NY, 10121
------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the issuer's classes
of common stock as of the most recent practicable date:
113,784,921
/1/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Consolidated Balance Sheet September 30, 2003 (unaudited) 4
Consolidated Statements of Operations For the Three and Nine Months 5
Ended September 30, 2003 and 2002 (unaudited) and For the Period
July 6, 2000 (Inception) to September 30, 2003 (unaudited)
Consolidated Statements of Cash Flows For the Nine Months Ended 6
September 30, 2003 and 2002 (unaudited) and For the Period
July 6, 2000 (Inception) to September 30, 2003 (unaudited)
Notes to Financial Statements 7
Item 2. Management's Discussion and Plan of Operation 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6(a). Exhibits 15
Item 6(b). Reports Filed on Form 8-K 16
SIGNATURES 17
/2/
Part I - Financial Information
Item 1. Financial Statements
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Balance Sheet
as of
September 30, 2003 (unaudited)
and
Consolidated Statements of Operations
for the Three and Nine Months Ended
September 30, 2003 and 2002 (unaudited),
and For the Period
July 6, 2000 (Inception) to September 30, 2003 (unaudited)
and
Consolidated Statements of Cash Flows
for the Nine Months Ended
September 30, 2003 and 2002 (unaudited),
and For the Period
July 6, 2000 (Inception) to September 30, 2003 (unaudited)
/3/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Balance Sheet
(unaudited)
September 30,
Assets 2003
-------------
Current assets:
Cash and equivalents $ 44,347
Accounts receivable, net of allowance for
doubtful accounts of $12,500 21,748
-------------
Total current assets 66,095
-------------
Fixed assets, net 1,238,763
-------------
$ 1,304,858
=============
Liabilities and Stockholders' Equity
Current liabilities:
Note payable to shareholder $ 91,078
Stock subscription payable 13,750
Notes payable 513,527
-------------
Total current liabilities 618,355
-------------
618,355
-------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding -
Common stock, $0.001 par value, 200,000,000 shares
authorized, 113,784,921 shares issued and outstanding 113,785
Additional paid-in capital 3,941,402
Treasury stock (96,750)
(Deficit) accumulated during development stage (3,271,934)
-------------
686,503
-------------
$ 1,304,858
=============
The accompanying notes are an integral part of these financial statements.
/4/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Statements of Operations
(unaudited)
For the For the
three months nine months July 6, 2000
ended September 30, ended September 30, (Inception) to
-------------------- ---------------------- September 30,
2003 2002 2003 2002 2003
--------- --------- ----------- ----------- -----------
(Restated) (Restated) (Restated)
Revenue $ 22,848 $ 500 $ 24,698 $ 1,555 $ 26,698
--------- --------- ----------- ----------- ----------
Expenses:
General and admini-
strative expenses 35,556 159,028 119,545 751,323 202,231
Payroll expense 48,415 - 171,209 - 358,028
Professional fees 11,465 - 54,693 - 226,545
Consulting expense 152,750 276,056 508,750 276,056 1,828,232
Software development - - 3,950 - 132,950
Depreciation 80,622 80,383 246,274 80,383 407,040
--------- --------- ----------- ----------- ----------
Total expenses 328,808 515,467 1,104,421 1,107,762 3,155,026
--------- --------- ----------- ----------- ----------
Other income (expenses):
(Loss) on debt
settlement (25,000) (68,363) (62,094) (68,363) (88,019)
Interest income - 1,885 561 2,852 2,791
Interest (expenses) (12,754) (14,399) (35,558) (22,650) (58,378)
--------- --------- ----------- ----------- ----------
Net (loss) $(343,714) $(595,844) $(1,176,814) $(1,194,368)$(3,271,934)
Weighted average
number of
common shares
outstanding -
basic and fully
diluted 100,990,475 21,027,802 92,711,681 33,279,930
=========== ========== ========== ==========
Net (loss)
per share -
basic and fully
diluted $ (0.00) $ (0.03) $ (0.01) $ (0.04)
========= ========= =========== ===========
The accompanying notes are an integral part of these financial statements.
/5/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Statements of Cash Flows
(unaudited)
For the nine months ended July 6,2000
September 30, (inception) to
-------------------------- September 30,
2003 2002 2003
------------ ------------ --------------
(Restated) (Restated)
Cash flows from operating
activities
Net (loss) $ (1,176,814) $ (1,194,368) $ (3,271,934)
Shares issued for services 508,750 276,056 1,828,232
Loss on debt settlement 62,094 68,363 88,019
Depreciation 246,274 80,383 407,040
Adjustments to reconcile net
(loss) to net cash (used) by
operating activities:
Decrease in accounts receivable 5,376 - -
(Increase) in notes receivable (34,248) (15,850) (21,748)
------------ ------------ --------------
Net cash (used) by operating
activities (388,568) (785,416) (970,391)
------------ ------------ --------------
Cash flows from financing
activities
Proceeds from convertible
notes - related party 50,000 - 50,000
Proceeds from notes payable 25,000 485,418 513,527
Payments on notes payable (1,890) - (37,493)
Accrued interest 3,095 - 3,095
Proceeds from note payable
to shareholder 130,606 - 130,606
Payments on note payable
to shareholder (20,347) - (20,347)
Stock subscription payable 13,750 - 13,750
Issuance of common stock 121,600 649,801 361,600
------------ ------------ --------------
Net cash provided by financing
activities 321,814 1,135,219 1,014,738
------------ ------------ --------------
Net increase in cash (66,754) 349,803 44,347
Cash - beginning 111,101 4 -
------------ ------------ --------------
Cash - ending $ 44,347 $ 349,807 $ 44,347
============ ============ ==============
Supplemental disclosures:
Interest paid $ - $ - $ -
============ ============ ==============
Income taxes paid $ - $ - $ -
============ ============ ==============
Non-cash transactions:
Number of shares issued for
services provided 26,309,748 276,056 45,927,485
============ ============ ==============
Number of shares issued to
acquire technology 2,500,000 - 2,500,000
============ ============ ==============
Number of shares issued for
debt settlement 741,875 - 741,875
============ ============ ==============
The accompanying notes are an integral part of these financial statements.
/6/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Note 1 - Basis of presentation
The consolidated interim financial statements included herein,
presented in accordance with United States generally accepted
accounting principles and stated in US dollars, have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the
information presented not misleading.
These statements reflect all adjustments, consisting of normal
recurring adjustments, which, in the opinion of management, are
necessary for fair presentation of the information contained
therein. It is suggested that these consolidated interim
financial statements be read in conjunction with the consolidated
financial statements of the Company for the period ended December
31, 2002 and notes thereto included in the Company's Form 10-KSB.
The Company follows the same accounting policies in the
preparation of consolidated interim reports.
Results of operations for the interim periods are not indicative
of annual results.
Note 2 - Going concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern, which
contemplates the recoverability of assets and the satisfaction of
liabilities in the normal course of business. As noted above, the
Company is in the development stage and, accordingly, has not yet
generated a proven history of operations. Since its inception,
the Company has been engaged substantially in financing
activities and developing its product line, incurring substantial
costs and expenses. As a result, the Company incurred accumulated
net losses from July 6, 2000 (inception) through the period ended
September 30, 2003 of $3,271,934. In addition, the Company's
development activities since inception have been financially
sustained by capital contributions.
The ability of the Company to continue as a going concern is
dependent upon its ability to raise additional capital from the
sale of common stock and, ultimately, the achievement of
significant operating results. The accompanying financial
statements do not include any adjustments that might be required
should the Company be unable to recover the value of its assets
or satisfy its liabilities.
Note 3 - Change in accounting principle
The Company determined during the nine months ending September
30, 2003 that it is appropriate to reclassify software acquired
in 2002 from intellectual property to fixed assets. The effect
of the change in accounting principle requires a restatement of
the December 31, 2002, and March 31, 2003 financial statements in
order to properly reflect the asset reclassification and the
related adjustment to depreciation expense. The effect of this
change was to decrease net income for the year ended December 31,
2002 and the three months ended March 31, 2003 by $119,988 and
$63,409, respectively. Retained earnings as of January 1, 2002
has been adjusted for the retroactive application of the change
in accounting principle.
Note 4 - Fixed assets
On February 5, 2003, the Company acquired fully-developed
software valued at $181,250 from CareDecision.net, Inc., the
former parent corporation of Medicius, Inc. Medicius, Inc. was
acquired by the Company in June 2002. Several of the control
persons from CareDecision.net, Inc. are in similar positions of
control at the Company.
Depreciation expense totaled $246,274 for the nine-month period
ended September 30, 2003.
/7/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Note 5 - Notes payable - related party
During the nine months ended September 30, 2003, the Company
received loans totaling $130,606 from a Company shareholder and
director. The notes bear interest at 9% per annum and are due
365 days from date of issuance.
During the nine months ended September 30, 2003, the Company
recorded interest expense of $35,558.
Note 6 - Convertible notes
During the nine months ended September 30, 2003, the Company
received a loan totaling $50,000 from a Company shareholder. The
note is convertible into 1,538,500 shares of the Company's $0.001
par value common stock at a strike price of $0.0325 per share.
The convertible note also carried with it 1,538,500 warrants
exercisable on a one-for-one basis at a strike price of $0.0325
per share. On April 22, 2003, the holder elected to convert the
note into 1,538,500 shares of the Company's $0.001 par value
common stock.
Note 7 - Stockholder's equity
During the nine months ended September 30, 2003, the Company
issued 8,000,000 shares of $0.001 par value common stock to
various individuals for consulting services valued at $356,000.
During the nine months ended September 30, 2003, the Company
issued 2,500,000 shares of $0.001 par value common stock to
acquire developed software valued at $181,250 from
CareDecision.net, Inc.
During the nine months ended September 30, 2003, the Company
issued 741,875 shares of its $0.001 par value common stock to an
individual as settlement for past debts valued at $37,094.
On July 21, 2003, the Company issued an 8% share dividend to its
shareholders of record. The Company issued 6,469,132 shares of
its $0.001 par value common stock pursuant to the dividend
issuance.
On July 1, 2003, the Company entered into a consulting agreement
with Anthony Quintiliana to perform information technology
services for the Company. As consideration, the Company issued
1,500,000 shares of $0.001 par value common stock on August 18,
2003, and stock options to purchase an additional 2,000,000
shares of $0.001 par value common stock at a strike price of
$0.05 per share pursuant to the Company's 2003 Stock Option Plan.
The shares will be registered and free-trading via Form S-8. On
September 18, 2003, Mr. Quintiliana exercised his options and
purchased 2,000,000 shares of stock for cash totaling $101,600.
On July 1, 2003, the Company entered into a consulting agreement
with Barbara Asbell to perform medical information technology
services for the Company. As consideration, the Company issued
2,500,000 shares of $0.001 par value common stock. The shares
will be registered and free-trading via Form S-8. Based upon the
terms of her consulting agreements, Ms. Asbell has agreed to
rescind an equal number of her existing shares bearing a
restricted legend.
On July 15, 2003, the Company entered into a consulting agreement
with Leslie-Michelle Abraham to perform corporate administrative
services for the Company. As consideration, the Company issued
stock options to purchase 850,000 shares of $0.001 par value
common stock at a strike price of $0.05 per share pursuant to the
Company's 2003 Stock Option Plan. The shares will be registered
and free-trading via Form S-8. On September 30, 2003, Ms.
Abraham exercised her options and acquired 850,000 shares of the
Company's $0.001 par value common stock for cash and services
totaling $42,500.
/8/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
On August 18, 2003, the Company issued 300,000 shares of its
$0.001 par value common stock to its employees for services
valued at $20,833.
On September 12, 2003, the Company issued 15,059,748 shares of
its $0.001 par value common stock to various individuals and
entities for past services valued at $644,001. The services have
been previously expensed and accrued for by the Company
throughout the year ended December 31, 2002, and during the nine
months ended September 30, 2003.
There have been no other issuances of preferred or common stock.
Note 8 - Related party transactions
During the nine months ended September 30, 2003, the Company
acquired fully-developed software from CareDecision.net, Inc, a
private corporation with several control persons serving in
similar positions at the Company. Pursuant to the agreement, the
Company paid CareDecision.net, Inc. the sum of $181,250 with
2,500,000 shares of the Company's $0.001 par value common stock.
During the nine months ended September 30, 2003, the Company
received $100,150 from Robert Cox, a Company shareholder and
Chairman of the Board. The notes are due on 365 days from
issuance and accrued interest at 9% per annum.
During the nine months ended September 30, 2003, the Company
received $50,000 from Dr. Thomas Chillemi, a Company shareholder,
the note is convertible into 1,538,500 shares of the Company's
$0.001 par value common stock and carries with it 1,538,500
warrants exercisable on a one-for-one basis at a strike price at
$0.0325 per share. On April 22, 2003 Dr. Chillemi exercised the
convertible portion of his note and converted the $50,000 debt
into 1,538,500 shares of the Company's $.001 par value common
stock.
On July 10, 2003, the Company entered into a consulting agreement
with Dr. Thomas Chillemi, a Company shareholder, to perform
corporate development services for the Company. As
consideration, the Company issued stock options to purchase
3,000,000 shares of $0.001 par value common stock at a strike
price of $0.05 per share pursuant to the Company's 2003 Stock
Option Plan. The shares will be registered and free-trading via
Form S-8.
On July 15, 2003, the Company entered into a consulting agreement
with Dr. Joseph A. Wolf, a Company shareholder to perform medical
information technology services for the Company. As
consideration, the Company issued stock options to purchase
950,000 shares of $0.001 par value common stock at a strike price
of $0.05 per share pursuant to the Company's 2003 Stock Option
Plan. The shares will be registered and free-trading via Form S-
8.
Note 9 - Stock option plan
On January 1, 2003, the Company adopted its "2003 Stock Option
Plan" (the "Plan") and granted incentive and nonqualified stock
options with rights to purchase 25,000,000 shares of the
Company's $0.001 par value common stock. The Company issued
13,500,000 shares of stock pursuant to the plan during the nine
months ended September 30, 2003.
On August 5, 2003, the Company entered into a consulting
agreement with Ely Mandell to perform corporate strategic and
developmental services for the Company. As consideration, the
Company issued stock options to purchase 150,000 shares of $0.001
par value common stock at a strike price of $0.05 per share
pursuant to the Company's 2003 Stock Option Plan. The shares
will be registered and free-trading via Form S-8.
/9/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Note 10 - Subsequent events
On October 31, 2003 Dr. Wolf exercised all 950,000 of his stock
options by rendering $47,500.00 in cash.
On October 1, 2003 Dr. Chillemi exercised 1,000,000 of his stock
options as consideration for services performed valued at
$50,000. On November 1, 2003, Dr. Chillemi exercised an
additional 1,000,000 of his stock options as consideration for
services performed valued at $50,000.
Note 11 - Reverse acquisitions agreement with Medicius, Inc.
(MED)
On June 21, 2002, the Company entered into an agreement with MED
whereby the Company acquired all of the issued and outstanding
common stock of NDI in exchange for 38,043,863 voting shares of
the Company's $0.001 par value common stock. The acquisition was
accounted for using the purchase method of accounting as
applicable to reverse acquisitions because the former
stockholders of the MED controlled the Company's common stock
immediately upon conclusion of the transaction. Under reverse
acquisition accounting, the post-acquisition entity was accounted
for as a recapitalization of MED. The common stock issued was
recorded at $0, being the fair value of the Company's assets on
the acquisition date.
/10/
Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements
about our business, financial condition and prospects that
reflect our assumptions and beliefs based on information
currently available. We can give no assurance that the
expectations indicated by such forward-looking statements will be
realized. If any of our assumptions should prove incorrect, or
if any of the risks and uncertainties underlying such
expectations should materialize, our actual results may differ
materially from those indicated by the forward-looking
statements.
The key factors that are not within our control and that may
have a direct bearing on operating results include, but are not
limited to, acceptance of our services, our ability to expand our
customer base, our ability to raise capital in the future, the
retention of key employees and changes in the regulation of our
industry. There may be other risks and circumstances that we are
unable to predict. When used in this Quarterly Report, words
such as, "believes," "expects," "intends," "plans,"
"anticipates," "estimates" and similar expressions are intended
to identify forward-looking statements, although there may be
certain forward-looking statements not accompanied by such
expressions.
General
The company is still in the development stage and is only
now beginning commercial delivery of its products and services.
In the quarter ended September 30, 2003 the company booked its
first revenues as a direct result of the implementation of its
proprietary technologies and products.
Our principal products are: an E-Health handheld information
appliance (PDA) software application package, and a permanently
affixed handheld information appliance and Wi-Fi (wireless)
network designed for the hotel, motel and apartment marketplace.
The company has applied for and received provisional approval for
a family of trademarks making use of the mark MD@. The
provisional approval applies to the first six individual marks
applied for by the company. In addition, the company is in the
process of applying for marks associated with its ResidenceWare
hotel/motel products and technologies.
We presently have a comprehensive suite of medical
information technology, cooperative advertising, instant
messaging and fulfillment, and electronic commerce applications
that are Internet enhanced, integrated for medical professional
use, and hotel management/guest use, both software suites
functioning through networks of wireless PDA Internet appliances.
The company's applications have been designed to meet the needs
of the inpatient and outpatient medical environments, and the
hotel management and guest (consumer), and are not just
commercially viable but also regulatory standard compliant.
Additionally, our software applications were conceived and
implemented to offer the management level user, either the
medical professional or hotel manager, the ability to manage
prospective and retrospective commerce. The company has filed
two broad based patent applications and intends to file
derivative patent applications covering the processes, use and
functionality of its technologies and products.
Our software is designed to integrate point of service
applications. The medical appliance, the longest available
product, monitors treatment protocols and up to the moment
patient histories coupled with real-time on-line medical
insurance claims submission. Our ultimate key to success resides
in providing the private practice physician with the capability
to, sequentially, learn about the history of his or her patient
during, or prior to, entering the examining room, treat the
patient and update the insurer of the episode of care.
Accomplishing these objectives resolves a major dilemma for the
health care provider; instantaneous communication of vital
patient related information at or before the patient encounter.
/11/
The Wi-Fi hotel/motel and apartment software makes use of
much of the foundation technologies resident in the medical
product, however, given the differences in the two markets that
the products service, the hotel/motel product is much more
cooperative oriented, offering more consumer transactional
services with the compliment of advertising.
Our medical technologies, the focus of one of the broad
based patent applications now in the patent prosecution stage,
are grounded in the central need to furnish the doctor with
crucial point-of-care patient information rapidly and reliably
via a PDA. The technologies utilize the power of the Internet to
move large amounts of data to and from a variety of platforms
securely via a powerful Windows CE based PDA designed for
portability and upgradability. Totally compliant with the Health
Insurance Portability and Accountability Act of 1996 ("HIPAA"),
this PDA technology is among the first to offer complicated and
real-time point of care applications, previously legacy
(mainframe or PC network) system applications, on a totally
portable (PDA) appliance.
Our technologies and products for the hotel/motel
marketplace are designed to furnish hotel and motel guests with a
menu of food service, office services and other remote service
(dry cleaning for instance) choices that can be electronically
ordered through the company's PDA-based information appliance for
delivery directly to the hotel/motel guest. Employing the
latest in commercial Wi-Fi technology, the company wraps the time
and volume tested commercial technologies into the company's
patent pending PDA communication networking technologies,
allowing the company to be the first to offer complex and real-
time point of sale applications through a totally wireless (PDA)
appliance.
Our PDA software operates on any Microsoft Windows CE
"Pocket PC" based handheld device, either in a wireless or
"wired" mode. The local host for our PDA devices is a Windows
(9X, NT or later) based PC in the physician's office, which, in
turn, permits one to eight of the aforementioned PDAs to be
linked to either a medical network or hotel/motel wide area
network, and allows each PDA to become a uniquely identified
mobile node on that network, independent of PC linkage, thereby,
assisting the professional in the review of relevant histories,
transactions, and for the medical related product --medications
and prescriptions, lab test ordering, medical step processes and
protocols and specialist referral processes.
The PDA software provides rules based software capabilities
and the ability to receive order fulfillment information for over
5,000 users simultaneously, which represents approximately 3
years of user encounters in a typical network setting, and allows
medical professionals to access payor and health plan business
rules, and policy/plan coverage's directly from the plan(s).
In May 2003 the company entered into an agreement with
PCHertz.com, Inc. of Fargo, ND for the distribution of and
servicing of their products and services for the hotel/motel
industry. The agreement with PCHertz.com, Inc. has resulted in a
series of orders for the company's hotel/motel products and
services from five hotel groups, owners of hotels and motels in
the states of California, Arizona, Illinois, Iowa, South Dakota,
North Dakota, Minnesota, Virginia, and Georgia. Initial
placement of product, now in the process of early implementation
under these agreements, will total at least 1450 of the company's
ResidenceWare units.
On September 23, 2003 we signed a Preliminary Agreement to
Merge with MDU Services Inc. ("MDUS"), a Texas-based provider of
private digital utility services to multiple tenant residential
and business building sites, hotels/motels and universities. The
Preliminary Agreement to merge specifies how CareDecision and
MDUS desire to execute a "triangle" merger agreement whereby
CareDecision shall acquire MDUS and then merge MDUS into a
subsidiary corporation, MDU Media Corporation (the "Merger Sub").
As of the date of this filing we are working on a definitive
agreement.
/12/
Results of Operations
The following is an itemization of our results of operations
for the nine-month period ended September 30, 2003 in comparison
to our results of operations for the period ended September 30,
2002.
REVENUES. Total revenues for the nine-month period ended
September 30, 2003 were $24,698 as compared to total revenues of
$1,555 for the nine-month period ended September 30, 2002. As a
development stage company we have yet to generate significant
revenues and we cannot guarantee with certainty when we will
begin to generate significant revenues. Our future revenues will
be reliant on the acceptance of our software systems,
communication tools and suite of software applications.
GENERAL AND ADMINISTRATIVE. General and Administrative expenses
relate to the operation and leasing costs of our corporate
office. General and administrative expenses for the nine-month
period ended September 30, 2003 were $119,545 compared to
$751,323 for the nine-month period ended September 30, 2002.
General and Administrative expenses decreased by approximately
84% from the comparable period as the Company consolidated
operations after its merger in 2002. The company, in
anticipation of its merger made purchases of equipment and other
office related supplies in conjunction with the start of initial
business operations in the nine-month period ended September 30,
2002.
PAYROLL. Payroll expense consists primarily of management and
employee salaries. Total payroll expense for the nine-month
period ended September 30, 2003 was $171,209. The Company
incurred no payroll expense for the nine-month period ended
September 30, 2002.
PROFESSIONAL FEES. Professional fees include fees paid to our
accountants and attorneys. Our professional fees were $54,693
for the nine-month period ended September 30, 2003. The Company
incurred no professional fees for the nine-month period ended
September 30, 2002.
CONSULTING. Consulting expense includes fees paid to consultants
in relation to the preparation of required SEC filings, and to
individuals engaged to assist management in the furtherance of
our business plan. Consulting expenses for the nine-month period
ended September 30, 2003 were $508,750 compared to $276,056 for
the nine-month period ended September 30, 2002. Consulting
expense increased by approximately 84% from the comparable period
as the Company has engaged the services of additional consultants
to assist in the furtherance of our business model.
SOFTWARE DEVELOPMENT. Software Development expense was minimal as
our software systems; communication tools and suite of software
applications are complete. Software Development expense for the
nine-month period ended September 30, 2003 was $3,950. The
Company incurred no software development expense for the nine-
month period ended September 30, 2002.
DEPRECIATION. Depreciation was $246,274 for the nine-month period
ended September 30, 2003 compared to $80,383 for the nine-month
period ended September 30, 2002. This represents depreciation on
the assets of the Company. Depreciation expense has increased
significantly from the comparable period due to the assets
purchased in the nine-month period ended September 30, 2002,
which are now on depreciation schedules.
TOTAL OPERATING EXPENSES. Total operating expenses for the nine-
month period ended September 30, 2003 were $1,104,421 compared to
$1,107,762 for the nine-month period ended September 30, 2002.
Total operating expenses were almost unchanged from the previous
period due mainly to an increase in consulting expense and
depreciation offset by a decrease in general and administrative
expenses. Our most significant operating expenses are consulting
and depreciation expenses.
/13/
LOSS ON DEBT SETTLEMENT. In the nine-month period ended September
30, 2003 the Company retired past debts valued at $62,094 as
compared to retired past debts of $68,363 for the nine-month
period ended September 30, 2002. We will continue to retire our
outstanding debt as revenue allows.
INTEREST INCOME. Interest income was $561 for the nine-month
period ended September 30, 2003 compared to $2,852 for the nine-
month period ended September 30, 2002.
INTEREST EXPENSE. Interest expense was $35,558 for the nine-month
period ended September 30, 2003 compared to $22,650 for the nine-
month period ended September 30, 2002. Interest expense
increased by approximately 57% as a result of the receipt of
loans totaling $130,606 in the nine-month period ended September
30, 2003 that bear an interest rate of 9%.
LOSS FROM OPERATIONS/NET LOSS. Our loss from operations was
$1,176,814 for the nine-month period ended March 31, 2003
compared to $1,194,368 for the nine-month period ended September
30, 2002. It should be expected that we will continue to incur
losses from operations until such time as revenues can be
generated to cover such costs.
Future Business
The elements of our future business strategy include:
expanding geographically into key markets through a combination
of opening new offices and developing relationships with clients
to generate demand for our services, particularly for the
company's hotel/motel and apartment products; recruiting
qualified, medical software and other technical personnel to
perform technical, implementation and support duties as contracts
are entered into, although there can be no assurance that any
such contracts will be secured; and pursuing entry into new
markets complementary to our proposed operations. Future
operations are dependent upon our ability to implement our
business and marketing strategies and to establish relationships
and contracts with health insurers and HMOs to provide our e-
healthcare products and services, and to establish relationships
with large hotel and/or motel chains for our hotel/motel
products.
Liquidity and Capital Resources
Management believes our cash on hand of $44,347 will not be
sufficient to fund ongoing fiscal 2003 and 2004 operations and
provide for our working capital needs given we have negative
working capital of $552,260. Thus we will from time to time need
to raise additional funds through capital markets. Our
accountant has issued a note concerning our ability to continue
as a going concern. As we are still considered to be in the
development stage, our prospects of continuing as a going concern
are contingent upon our ability to raise additional capital and
to achieve and maintain profitable operations. Revenues
generated over and above expenses will be used for further
development of our services, to provide financing for marketing
and promotion, to secure additional customers, equipment and
personnel, and for other working capital purposes.
To date, we have financed our cash flow requirements through
an issuance of common stock and through the issuance of notes.
During the nine months ended September 30, 2003, we received
loans totaling $130,606 from a Company shareholder and director.
During our normal course of business, we will experience net
negative cash flows from operations, pending receipt of revenues.
Further, we will be obtaining financing to fund operations
through additional common stock offerings, note issuances and
bank borrowings, to the extent available, or to obtain additional
financing to the extent necessary to augment our available cash
on hand.
All investor inquiries should be directed via mail to Mr.
Robert Cox, President, CareDecision Corporation, 2660 Townsgate
Road, Suite 300, Westlake Village, California 91361.
/14/
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
In January 2003 M&E Equities, LLC ("M&E") and Blimie
Mendlowitz (the "plaintiffs") filed a complaint against
CareDecision Corporation, Medicius, Inc., Keith Berman, and
William Lyons (the "defendants") for failure to repay note
principal and interest and failure to deliver common stock
warrants pursuant to the terms of a Senior Convertible Note
Subscription Agreement and a Senior Convertible Promissory Note
Agreement issued to the plaintiffs.
Specifics regarding the case are as follows:
Case Name: M&E Equities, LLC, and Blimie Mendlowitz,
against CareDecision Corporation, Medicius,
Inc., Keith Berman, and William Lyons.
Court: Supreme Court of The State of New York
County of New York.
Case Number: 600092-03
In June 2003 all parties executed a Settlement Agreement.
The Company believes that the terms of the settlement have been
fully satisfied, and has been notified by Plaintiffs that the
litigation has ended, but as of November 10, 2003 had not
received a court executed dismissal.
Item 6(a) - Exhibits
Exhibit Name and/or Identification of Exhibit
Number
3.1 Articles of Incorporation & By-Laws
(a) Articles of Incorporation of the Company
filed March 2, 2001. Incorporated by reference
to the exhibits to the Company's General Form For
Registration Of Securities Of Small Business
Issuers on Form 10-SB, previously filed with the
Commission.
(b) Certificate of Amendment to the Articles of
Incorporation of the Company filed May 9, 2001.
Incorporated by reference to the exhibits to the
Company's General Form For Registration Of
Securities Of Small Business Issuers on Form 10-
SB, previously filed with the Commission.
(c) Certificate of Amendment to the Articles of
Incorporation of the Company filed August 2,
2002. Incorporated by reference to the exhibits
to the Company's June 30, 2002 Quarterly Report
on Form 10-QSB, previously filed with the
Commission.
3.2 By-Laws of the Company adopted March 16, 2001.
Incorporated by reference to the exhibits to the
Company's General Form For Registration Of
Securities Of Small Business Issuers on Form
10-SB, previously filed with the Commission.
31 Rule 13a-14(a)/15d-14(a) Certification
32 Certification under Section 906 of the Sarbanes-
Oxley Act (SECTION 1350)
/15/
Item 6(b) - Reports Filed on Form 8-K
For the quarter ended September 30, 2003 the Company filed a
report on Form 8-K with the Securities and Exchange Commission on
July 11, 2003. The Company announced, under Item 5. Other
Events, an eight percent (8%) dividend payable in common stock.
The shares, which are restricted securities, were distributed on
or before October 15, 2003, to shareholders of record as of July
21, 2003. In the computation of the eight percent (8%)
restricted common stock dividend, any fractional remainder was
rounded up to the nearest whole share. The Company requested
that each shareholder turn in their certificate(s) in exchange
for a new certificate(s) on or prior to September 30, 2003 to
receive the dividend, although this was not mandatory to receive
the dividend. Further, on July 1, 2003, the Company changed its
address. The Company's new address is 2660 Townsgate Road, Suite
300, Westlake Village, CA 91361. The Company's new phone number
is (805) 446-1973 and new fax number is (805) 446-1983. No
financial statements were included in this report.
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/16/
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
CareDecision Corporation
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(Registrant)
Date: November 12, 2003
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By: /s/ Robert Cox
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Robert Cox
President and CEO
Date: November 12, 2003
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By: /s/ Keith Berman
----------------
Keith Berman
Secretary and Treasurer/CFO
/17/